New Delhi: The BJP government think tank has a new alibi for the sputtering economy in the last three years. According to none other than Niti Aayog vice-chairman Rajiv Kumar, the policies of former RBI governor Raghuram Rajan were responsible for the declining growth rate in over half-a-dozen quarters.
Kumar was responding to the ‘false narrative’ of the Congress that there was a direct link between demonetisation and the economic slowdown. “If you look at the growth rate statistics, it came down not because of demonetization, but was simply the continuation of a trend. Growth rate had been falling for six quarters,” said the NITI Aayog Vice Chairman.
“The growth was declining because of the rising NPAs, the non-performing assets in the banking sector. When this government came into office, those figures were about Rs 4 lakh crore. It rose to Rs 10.5 lakh crore by the middle of 2017,” Kumar explained. He points out that with the mounting NPAs under Raghuram Rajan, the banks stopped giving credit to industry; in fact, in some cases like that of the Micro, Small and Medium Enterprises, credit actually shrank. This led to sluggishness in the market and decline in the GDP growth rate.
“This has been an instance of historically the highest deleveraging of the commercial credit to the industries in India’s economic history. Never has been seen such a consistent year upon year deleveraging of credit. This was the cause for the slowdown of the growth. And, this is what has been compensated by the government by the ramping up of the public capital expenditure,” Kumar said, reports a news portal.
The GDP growth rate for April-June quarter of 2018-19 has been recorded at 8.2 per cent. Experts are aghast at the BJP putting forth such alibis. Only the other day, Petroleum Minister Dharmendra Pradhan had blamed “external” factors for the rise in petrol and diesel prices.